For a health insurance shopper, reading through the literature of different health plans can be rather overwhelming. The information is usually provided in a complex format where narrowing down the most relevant details becomes difficult. Plan details usually include multi-tiered payment options, along with complex calculations about cost-sharing and coverage-limitation scenarios. The Affordable Care Act seeks to make shopping for health insurance an undemanding and well-informed process.
This is why the Summary of Benefits of Coverage (SBC) was put into effect in September 2012.According to this mandate, every health insurance payer, including those who will be listed on the State Exchanges, needs to provide easy-to-understand and detailed description about their health plans. In the health exchange ecosystem, all the insurers operating on a State Exchange should use the same SBC form. An uniform format allows consumers to easily compare the benefits and coverage limitations across different plans.
The SBC can be interpreted as the healthcare industry’s equivalent to Nutritional Fact labels found on packaged foods. Both seek to provide easy-to-compare information in a standardized format. Statutes explaining the SBC provide clarity regarding:
• Appearance—the SBC should be provided in not-more-than four pages and the font shouldn’t be less than 12 point.
• Language—the SBC will be primarily provided in English but to address linguistic challenges, it should be available in different, regionally-predominant languages too. People can also request the SBC in their preferred language from the insurer.
• Content—the SBC should contain standard definitions of terminology used in the document so that consumers can understand every aspect of health insurance coverage. Providing a glossary of terms is recommended. All cost-sharing situations or those related to coverage reductions, exceptions and limitations should be detailed along with mentioning conditions for renewability/continuation of coverage.
• EHB—the SBC should include a list of Essential Health Benefits (EHBs) that have been made mandatory for all health plans. EHBs constitute the minimum coverage that all health plans should offer to ensure basic coverage for all enrollees. This usually includes hospitalization, ambulatory services, rehabilitative services, chronic disease management and maternity care.
The SBC should include Coverage Examples. This means publishing demonstrative situations where the coverage won’t be applicable or will lead to greater out-of-pocket expenses. As the health care reforms take a more definitive shape, insurers will have to provide six illustrations in the SBC and explain how their policies cover complex care scenarios. Insurers would need to provide clarity about coverage in situations where different types of treatments are combined, such as cardiac treatment where hospitalization, rehab, surgical care, etc. are often required. In simulations provided as a part of SBC, insurers would also need to explain the processing of claims, clarifying what the consumers would end up paying in different cost-sharing scenarios. This will help consumers estimate their out-of-pocket costs in similar situations.
Do Detailed Coverage Examples Make Sense?
Recently, health insurance payers were notified that their coverage examples should include standardized premium calculators for providing consumers a transparent view of how coverage is calculated. These calculations are of immense importance since the cost differential can be substantial across different health plans. For instance, in the management of diabetes, some plans exclude supplies such as test strips while some replace these exclusions with incredibly high, out-of-pocket expenses. Cost sharing for generic drugs presents a lot of variations too. Physician visits too present a different range of out-of-pocket expenses depending upon the health plan, type of visit and the healthcare provider. As well as, hospital care scenarios underline the need for coverage examples since co-pay amounts vary significantly, across different health plans.
It is hard to think of a downside to insurers providing an SBC and consumers having access to more information before purchasing health insurance. But I am sure some will disagree. Let’s hear how you feel.